This post comes from Christopher Weaver at partner site The Wall Street Journal.
Nearly four years after President Barack Obama signed his health initiative into law, the Affordable Care Act is officially reshaping America's $2.75 trillion health-care system.
A survivor of bare-knuckle political fights, a U.S. Supreme Court challenge and a technologically disastrous rollout, the law now faces a fundamental test: Can its mix of government subsidies and market-based competition extend health insurance to millions of people whose medical conditions, income level or personal choice left them without it?
So far, there are some troubling signs. A high proportion of people signing up for new plans are older or have existing health problems -- and not enough younger, healthier people may be joining the plans to balance them out and make the plans profitable.
Early glitches in HealthCare.gov
, the federal marketplace serving 36 states, as well as in some state marketplaces likely deterred younger customers, said insurers and actuaries. Less-healthy shoppers were more likely to persist and sign up, they said.
If the trend continues as 2014 enrollment closes at the end of March, insurers in the new marketplaces "will think twice about losing money" and withdraw plans, said Jim O'Connor, an actuary at Milliman Inc. Provisions of the law aim to limit insurers' risk by redistributing money to those with less-healthy customers, but it isn't yet clear how effective they will be.
Joanne Peters, a spokeswoman for the Department of Health and Human Services, which oversees the law's rollout, said the law "is making health insurance more affordable for young adults." Officials aren't yet able to provide demographic breakdowns of marketplace enrollees, she said.
Julie Bataille, communications director for the Centers for Medicare and Medicaid Services, told reporters this week that as of Jan. 1, "millions of Americans will have health insurance, many for the first time."
Meantime, some previously insured consumers are vexed that deductibles under the new policies are higher than under prior plans, which can make doctors' visits and procedures more expensive than they anticipated.
Moreover, 25 states have refused to expand Medicaid, the state-federal health plan for low-income people. The expansion was envisioned under the law as a backstop for the poorest uninsured, who now have few options in those states.
The array of challenges has hurt Mr. Obama's standing and public support of the law, which polls show dropped to a new low in late December.
Boosted by repairs to the online exchanges, 2.1 million people used them to obtain private insurance through Dec. 24, the deadline for picking coverage effective Jan. 1 in most states, U.S. health officials said Tuesday.
The number represents a surge since Nov. 30, when the nationwide figure was about 365,000, but it falls short of a September estimate by the administration that some 3.3 million people would sign up for private plans by year's end.
People such as Carlos Gomez, a 55-year-old part-time retail clerk in Fort Lauderdale, Fla., who had been rejected by insurers because of a heart disorder, are among the law's beneficiaries.
Mr. Gomez recently signed up for a Humana Inc. plan that will cost him $150 a month after federal subsidies. As he and other customers with medical conditions gain coverage, they are upending insurers' traditional business model of charging riskier customers higher rates or denying them altogether, practices banned under the health law.
Tom Noland, a Humana spokesman, said that though "the launch of the exchanges has brought unforeseen developments for consumers, health plans and the government, we remain confident in our ability to succeed" in the new marketplaces.
Mr. Noland said Humana's experience managing private Medicare plans—which also can't turn away patients with existing conditions—would help it navigate the risks of the new system.
Meanwhile, hospitals such as Broward Health, a south Florida publicly funded hospital that has treated Mr. Gomez without compensation, stand to gain new paying customers.
Hospitals, required to treat patients who show up in their emergency rooms under a 1970s-era law, long have shouldered the costs of the uninsured. Now, those risks are expected to begin shifting to insurers and taxpayers.
Broward Health has invested about $100,000 in new computers to help people enroll online under the health law at 19 of its locations, said Chief Executive Frank Nask. The Fort Lauderdale health system treats about 14,000 people through a charity-care program, and about 4,800 of them are expected to qualify for the new plans, he said.
Before offering free care, Broward now will ask to see proof that patients were unable to obtain coverage under the law.
Mr. Nask said the financial implications of the shift aren't yet clear. "There's a lot more art to this than science," he said.
For-profit hospitals also are looking to speed the shift. Under the law, hospitals face up to $36 billion in cuts to government payments for uncompensated care over the next five years.
Tenet Healthcare Corp. sees the coverage expansion as a growth opportunity. The hospital operator spent $570 million treating uninsured patients in 2012, according to a November investor presentation. It is urging its own uninsured patients to enroll in coverage and lending its resources to nonprofits enlisted by the Obama administration to help people enroll in plans, such as the Epilepsy Foundation of Florida, which helped Mr. Gomez sign up.
Dan Waldmann, a Tenet senior vice president, said the company isn't focused on shepherding only its sickest patients into the insurance market. "We're enrolling young people, too," he said.
As the coverage begins, insurers have cautioned that many customers haven't yet paid their premiums, a requirement for coverage to kick in, and that data problems linked to HealthCare.gov's glitches persist.
Taken together, consumers who believe they are covered may find that their plans don't have complete enrollment information on file as they begin to seek care this week.
"There will be people who did everything they should have done, but whose information was somehow lost in the exchange, who will be seeking care," said Geoff Bartsh, vice president of Medica, a Minnesota-based insurer.
Mr. Gomez, the Florida heart disease patient, lost coverage offered by a previous employer last year. After that, he faced sky-high rates for coverage due to a stroke he suffered in 2008 tied to a heart condition called atrial fibrillation.
While uninsured, Mr. Gomez received piecemeal treatment at emergency rooms, along with a costly heart procedure at Broward Health. The hospital had charged his previous insurer more than $100,000 for an earlier, identical procedure, he said.
Prescribed the blood-thinning drug Pradaxa, Mr. Gomez was unable to fill the prescriptions—which retail for about $320 for a 30-day supply—after running out of free samples provided by his doctor. Pradaxa maker Boehringer Ingelheim GmbH declined to confirm retail prices.
"If something happens, just run to the emergency room," Mr. Gomez said his doctors advised. "That's why I need to have my insurance."
Under the law, he is eligible for a $402-a-month federal subsidy to help buy coverage, based on his income of about $12,000 a year. Knowing he would use medical services, he chose a top-shelf Humana plan with a monthly premium of $552 for a patient of his age, regardless of health.
Like many patients, he is still waiting for Humana to send a bill, though the Louisville, Ky.-based insurer is giving its first wave of enrollees until Jan. 31 to pay their initial premiums.
One younger consumer benefiting from the law is 27-year-old Candice Erickson in Bixby, Okla., who was diagnosed with lupus in February. After her husband switched to a new job, Ms. Erickson discovered private insurers no longer would cover her. "Once this ACA thing goes through, you can call us back," Ms. Erickson said insurers told her.
This month, she hopes to get a policy from Blue Cross Blue Shield of Oklahoma -- though on New Year's Day she was still working out details, including whether she would qualify for subsidies to help cover the cost.
"As a program of this magnitude is implemented, we're dedicated to educating our members about the enrollment process," said Lauren Perlstein, a spokeswoman for Health Care Services Corp., parent company of Blue Cross Blue Shield of Oklahoma.
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